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Rostenkowski to introduce tax simplification bill.

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Addressing the American Institute of CPAs spring tax division meeting, House Ways and Means Committee Chairman Dan Rostenkowski D-Ill.) said he plans to introduce a tax simplification bill.

"I will do everything I can to see that the bill moves along in my committee and in the House," he said.

"This measure will not be a simplification bill to end all simplification bills," Rostenkowski remarked. "We stand a better chance of success if we proceed incrementally and simplify discrete portions of the code rather than try to do the job in one stroke. "

The House Ways and Means Select Revenue Measures Subcommittee, headed by Charles Rangel (D-N. Y.), is currently studying legislative proposals to simplify portions of the Internal Revenue Code addressing widely held partnerships, pensions and tax-exempt bonds.

Rostenkowski said he would "try to control my committee's appetite" to attach items unrelated to simplification to his bill, such as proposals to extend tax breaks set to expire this December.

Not a fairness" bill. Rostenkowski also noted his bill would not aim to increase the fairness of the tax code. A revenue-neutral tax fairness package introduced in May by Ways and Means Committee member Thomas Downey (D-N.Y.) and Senator Albert Gore (D-Tenn.) calls for, among other things, a new 800 refundable tax credit for children, an expansion of the earned income tax credit, an increase in the top income tax rate to 35% and an 11 % surtax on upper income taxpayers.

"I'm very doubtful a tax fairness package could pass the House, much less get the President's signature," Rostenkowski told the meeting. IRS OFFICIALS HAVE THEIR SAY AT TAX DIVISION MEETING A number of Internal Revenue Service officials described the IRS's plans and goals at the American Institute of CPAs spring tax division meeting in Washington, D.C.

Corporate guidance. Practitioners can look forward to a "plethora" of guidance in the corporate tax area during the next couple of years, said Edward Cohen, branch chief in the IRS's Office of Assistant Chief Counsel (Corporate).

Cohen said limitations placed on the areas for which the IRS will issue private rulings, including consolidated returns and corporation reorganization under Internal Revenue Code section 355, have freed up resources that can be concentrated on issuing regulations and rulings for areas that have no clear guidance.

Technical corrections. Harry Gutman, chief of staff of the Joint Committee on Taxation, told the meeting that tax technical corrections bills introduced this session were "modest" in scope to avoid any cost ramifications.

In order for an amendment to existing legislation to be considered technical," the staffs of the Joint Committee, the House Ways and Means Committee, the Senate Finance Committee, the Treasury Department and the IRS must agree the proposed change would correct a technical error. A proposal that fails to meet this criteria must be "scored" to determine its revenue effect, Gutman said, and revenue offsets found.

Simplifying tax returns. Deputy IRS Commissioner Michael Murphy said the IRS is continuing to work for simpler tax returns. "The burden on the taxpayers of this country is too much," Murphy remarked. "There are tremendous opportunities to improve on the system."

Leonard Podolin, chairman of the AICPA tax executive committee, cited estimates that individuals spent 3 billion hours working on their tax returns in 1989-a 50% increase since 1982.

Murphy said half of all American taxpayers now feel it necessary to pay a professional to fill out their tax returns.
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Title Annotation:Dan Rostenkowski
Publication:Journal of Accountancy
Date:Jul 1, 1991
Words:572
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